Teressa Just pointed out... Well this is the thought I had today.
Back on my Theme of "Through the looking glass", I was remembering how the Trade of the Jan-May period was some kind of "Great Depression Redux" and Hyperinflation Trade.
It's interesting that, people thought that somehow we could go through Massive Deflation as the "Shadow Banking system" collapsed, and have Hyperinflation. As I was sitting here and listened to the "Fast Money" crowd, and the stared talking about Hyperinflation. BTW they were more talking about "super sized inflation" even though they said Hyperinflation and invoked "Jim Rogers".
Cause if you believed in Hyperinflation, you would move the hell out of anything in dollars. I'm not saying that there isn't inflation somewhere down the road..... But that is somewhere down the road, and after the contraction is over.
Tuesday, November 25, 2008
Hyperinflation
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5 comments:
I saw your comment on T.Lo's site and added my own.
I cannot tell what her bias is. Is she recommending gold because she agrees with the Fast Money/Jimmy Rogers crowd that hyperinflation is around the corner? She's never very clear.
My take is that the govt is determined to re-flate the economy by any means available-- and a trillion dollar deficit is not out of the question. Obama talks about fiscal discipline, but get real: it ain't gonna happen.
Gold should do okay no matter the inflation or deflation status.
Watch out, the screen is deceptive, and sometimes it is just showing a Technical bounce, that you can get in any stage, Like the "Valuation is good stage", which could go on for a few weeks, and be a nice trade.
Realize it's getting to the top of the list, and what does it mean when a long gets to the top of the list?
Also, in your comment you aren't differentiating between the "Trading Screen" and the portfolio.
In response to your comment, the question Macro, is Can we create enough inflation to counter the disinflation.
There is a chance that we can't.
If you want my other take on Teresa's response, which is just smart advice.
My Interpretation is "don't" get caught up in your own 'Macro' call, what every it is.
Because the Crowd, Like the guys that never saw that move in gold in Jan.... Who are now trading it, Well those guys are going to start calling a bottom and move into it, for a while. At one point the "Last Sucker" could hit the pool, and the move will be over.
I'm wondering if the "Macro" Call on Fast money for hyperinflation, will complete this leg in gold/dollar,as a measure of sentiment, but I suspect it's probably just wave 3, and we may still get a wave 5.
remember, The united states and china, are big enough that they aren't as leveraged as other countries/currencies. We also have assets.
Because we are a central government with central policies, it's much easier for us to generate financial stability, than anyone... It's why the Dollar is the Safe Harbor.
Yes, I realize that I may be mixing up the macro opinion with 'trading calls', but I was actually referring to T.Lo's relatively recent call on GLD in the Strategic Satellite Portfolio. She took out FXF and added GLD about three or four weeks ago.
Was this swap a trading call? if so, it seems to have been the right decision and I'm just trying to wrap my mind around why/how she knew this. Was she factoring in the macro situation with a worldwide infusion of liquidity, or was she just looking at Elliot waves? I respect that she has a Proprietary Model, but I'm trying to intellectualize the move.
As you know, there are two considerations at work: 1) the immediate trades, and 2) the long-term retirement fund holdings.
Usually I don't futz with #2 too much, but T.Lo makes a point of changing the allocation every week or so... and I'm just trying to figure out why she makes certain moves.
My impression was that there was a concern that the FXF was too exposed to a "White Swan/Black swan in Switzerland"... Too many eggs in one basket.(even though it is hard currency) The theme is "Well Diversified" and the FXF... was a proxy for Gold anyways. That was the reason for the Swap.
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